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Making the Placebo Effect Work for your Business


Wouldn’t it be great if you could just pop a pill and hey presto!… you’re Bill Gates? Well, maybe not that pill. But how about one that turns you from entrepreneurial dreamer into successful business person, from someone with ideas to someone who takes action, from someone who wants to someone who achieves?

Usually, those sorts of transformations require massive amounts of hard work, long investments of capital and sometimes a complete personality change too. But it doesn’t have to be that way. Popping placebos has long been known to end even the toughest illnesses and it’s possible that there are a few little sugary confidence tricks that can have an equally transformative effect on a business’s growth.

Take one Sales Pill After Meals

Seth Godin, for example, has talked in the past about marketing as a kind of placebo effect. A product that’s no different to any other on the market and only a little different from its previous model suddenly becomes the most incredible innovation since… well, the last most incredible innovation. The item itself is nothing special. What makes the difference is the status of its source or the sound of the sizzle:

“We don’t like to admit that we tell stories, that we’re in the placebo business,” he wrote once on his blog. ” Instead, we tell ourselves about features and benefits as a way to rationalize our desire to help our customers by allowing them to lie to themselves.

“The design of your blog or your package or your outfit is nothing but an affect designed to create the placebo effect. The sound Dasani water makes when you open the bottle is more of the same. It’s all storytelling. It’s all lies.”

Or not lies so much as packaging, but Seth does have a point. The marketing itself is valueless; it doesn’t make the product any better. But it does make it more desirable which means that the buyer appreciates it more, uses it more, finds it more satisfying and pays more for it.

The best example of the placebo effect on a product has to be the iPod which didn’t offer much more than any other MP3 player, and might even have offered a lot less. But it had a clickwheel, came in a beautiful shade of white and everyone had one. So Apple was able to move them by the truckload while charging twice as much as everyone else.

Placebos that effective don’t come along every day (unless you happen to work in an Apple store) but we do see less powerful placebos all the time, even when we don’t want to. Every television laundry detergent ad, for example, promises that thanks to the addition of some new enzyme/hormone/whitener/ whatever, it now washes clothes a purer shade of white than you’ll find in an angel’s underwear drawer… and impressed by the animated grime molecules, we conveniently forget that that’s what they told us about the last version which, the company now effectively concedes, left embarrassing stains.

For anyone with a need to market, the formula should be clear: good marketing might contain nothing but air, but when pumped into a product it can dramatically inflate its apparent desirability.

The Placebo for you

Marketing then is the placebo for products. But a placebo also exists for the creators of those products, the entrepreneurs with the twinkle in their eyes and the dreams of passive income. The formula isn’t quite as complex as the magic mix that goes into successful marketing but it can still be just as transformative.

You can think of this placebo as acting like a steroid. It doesn’t pack testosterone, but it does have the power to turn a seven-stone business weakling into a hard-punching heavyweight.

Or at least to feel like one, which is half the job.

The idea is simply to hang around with people who have already achieved the success you’re looking to build.

They’re not always easy to find, of course, which is where the mix gets hard to put together. If you’re located in a center of entrepreneurship like Silicon Valley or Seattle, then it might just take some brave networking. If you’re further afield, hanging out in some carefully-selected online groups might be enough to do the trick.

The result though should be a feeling that you’re already part of the club. You might not be the CEO of your own company yet but when you spend a lot of time with CEOs, you should start to feel like one – or at the very least, someone who should be one. That might just be enough to give you the boost you need to take action.

You can think of this as really a type of peer pressure but it’s no less effective – and the cause of the change no more concrete – than the influence that turns a touch-screen telephone into an iPhone.

It’s all false but the effect is real and powerful.

Placebos have been known to work in medicine and they can work in business too. Ultimately though, their success can only be measured by their results, and they’re only going to come if the product – or the person – is effective anyway.

Even the best marketing will have limited effect on a poor product (as Coca Cola discovered with Dasani) and even shopping for turtlenecks with Steve Jobs won’t turn you into an electronics tycoon.

But combined with a good product and determined action – like a healthy diet and plenty of exercise – the right placebo might well cure the ailments hampering your business development.



One Comment

  1. Alex the Freelance Twin Says:

    Great post. You really got me thinking about marketing ... gimmicks. And it's true if you have something catchy (even if completely useless) on your blog, it's a great way to retain readers.

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